Garden Oaks is a desirable neighborhood in part because of its deed restrictions.
They are not being enforced by a homeowners’ association as the the bankruptcy case involving the Garden Oaks Maintenance Organization (GOMO), which serves as one, continues to drag on. The City of Houston has the authority to enforce certain deed restrictions, but the neighborhood is without a functioning HOA for the foreseeable future.
GOMO, which has enforced deed restrictions in the affluent Northwest Houston neighborhood since the early 2000s, lost its authority to operate in early June when a federal bankruptcy judge converted the yearlong case from Chapter 11 to Chapter 7. The power to function as an HOA now lies with Houston attorney Randy Williams, who was subsequently appointed as GOMO’s trustee by the U.S. Department of Justice.
But Williams said last week he has no intention of fulfilling the day-to-day duties of a homeowners’ association. Instead, he is collecting claims against GOMO and determining what to do with its assets.
“They turned the money over to me,” Williams said. “I’ve got $600,000 and change in a bank account now. I’m waiting on people to file claims.
“I’m not going to conduct (HOA) business,” he added. “I’m not going to seek approval (from the court) to conduct business.”
According to a notice of assets filed with the court in July, potential creditors seeking to “share in any distribution from the estate” must file claims on or before Oct. 21 with the Office of the Clerk of the Bankruptcy Court. Claim forms, along with information about how to submit claims, can be found at gardenoaks.org.
Before the case was converted from Chapter 11 to Chapter 7 by Judge David Jones, GOMO office manager Pam Parks said there were nearly 400 claimants seeking a total of about $1.45 million.
GOMO filed for bankruptcy in April 2018 after a state district court found it had no authority to collect transfer fees, its primary source of revenue, because it violated the Texas Property Code while petitioning residents to include them in the deed restrictions in the early 2000s. Parks has said the GOMO attorney, Johnie Patterson, will argue that the statute of limitations for claims related to GOMO’s improper petitioning long ago expired.
On Monday, Williams filed an application to employ Patterson as his special counsel in the case for the purposes of “reviewing and prosecuting claim objections and to address litigation matters for the estate.”
A few days before filing that application, Williams said, “There’s some issues about whether or not people can make all these claims that they filed now, because of some timing issues, and I’ve been looking at stuff on that. Ultimately, it will probably have to go to the court to be decided.”
In the meantime, a Garden Oaks neighborhood with about 1,100 homeowners is effectively left without a homeowners’ association. When the case was converted in June by Jones – who said he did so because GOMO and the court-appointed committee of unsecured creditors were unable to agree on a restructuring plan – Williams said that “sort of put a stake in it.”
“I thought people would rethink their stance, sit down amongst each other and say, ‘You know what, we really don’t need you (and can come to an agreement),’ ” Williams said. “Apparently they’re entrenched or confident enough, or they don’t care that they don’t have a homeowners’ association anymore.”